Farmdale: Put California whey factor back to 25¢

California’s Farmdale Creamery has proposed a new – but old – alternative whey factor for consideration when a hearing is held on California’s Class 4b milk pricing formula, May 31-June 1. The dairy processor, headquartered in San Bernadino, Calif., said the value of whey used in determining the price farmers receive for milk processed into cheese should go back to 25¢/cwt., as it was prior to adjustments made on Sept. 1, 2011.

 

In its proposal, posted on the California Department of Food & Agriculture "hearing matrix” website, Farmdale president Norman Shotts II and controller Scott Hofferber said last fall's Class 4b formula adjustments, using a sliding scale whey factor between 25¢-65¢/cwt., had been financially harmful to smaller cheese makers in the state. The letter said small cheese makers represented about two-thirds of the state’s cheese-making community and processed abut 15% of the Class 4b milk in California. They said small manufacturers faced the dual challenge of having to pay for whey disposal, while being prevented from building cost-prohibitive whey processing facilities. Those two factors left small cheese manufactures unable to recoup the whey’s value in the higher milk prices paid to farmers.

 

CDFA previously received two separate petitions from California dairy producer groups requesting a public hearing, and proposing changes to the whey factor/Class 4b formula. One was received by a group including California Dairies, Inc., Dairy Farmers of America – Western Area Council, Land O’Lakes, Inc., Security Milk Producers Association, Milk Producers Council, California Dairy Campaign and Alliance of Western Milk Producers. Another was received from Western United Dairymen (WUD). 

 

Their proposals modify the current sliding scale in the Class 4b formula to allow the whey factor to more closely reflect the whey value generated by the current federal milk marketing order Class III formula. According to WUD, since the sliding scale – with the 65¢/cwt. cap – was implemented, the California whey value averaged $1.93/cwt lower than in federal orders. Looking at April’s comparable milk prices, the California Class 4b price is $13.42/cwt., while the federal order Class III price is $15.72/cwt., a difference of $2.29/cwt.

 

The deadline to submit alternative proposals was May 1. A public workshop will be held, May 15, in Sacramento, to review all proposals. CDFA will provide some background and limited analysis of the petitions on those proposals. Hearing exhibits will be available for public inspection on May 24, with the hearing, set for May 31-June 1, in Sacramento, Calif.

 

For more information, visit http://www.cdfa.ca.gov/dairy/dairy_hearings_matrix.html.